Christie Place Condo Owners Object to Homestead Tax Option

You never know who you'll meet at the Scarsdale Forum. On the agenda for the meeting on February 6 was a discussion of the Homestead Tax option, which would revise the way the Village assesses and taxes condominiums. As the Village is now undergoing a tax revaluation, they now have the option of adopting the "Homestead Tax Option " which would triple the real estate taxes for Christie Place homeowners. The extra revenues from the condo owners would be used to save the remaining Scarsdale homeowners an estimated $150 each.

A committee of Forum members studied the issue and recommended that the Scarsdale Board of Trustees and the Scarsdale Board of Education pass a resolution to adopt this tax option. Their report was approved by "expeditious treatment" by the committee. However, in order for it to be adopted by the Forum the report was put before the entire Forum at their meeting last week.

As Committee Chair Bob Berg was not present, Bob Harrison and Ed Morgan led the discussion. Morgan argued that condominiums now have an unfair tax property break and that passing the Homestead Tax option will "advance the goal of fairness of the property tax burden in Scarsdale." He called the current system "a loophole" and said that since all properties in Scarsdale were currently being revalued by the assessor, the condominiums should be as well. He conjectured that if the tax burden for the condos rose, the value of the properties would go down and lower assessments would yield lower real estate taxes for the condo owners.

Several condo owners from Christie Place were at the meeting to argue their case, including prominent attorney Irving Picard, who has achieved national fame as the trustee in charge of recovering funds from the Madoff scandal.

On Thursday, Picard took the mike to argue on behalf of himself and the other 41 Christie Place condominium owners. He said, "You talk about fairness. What's missing is background about the building. Ginsburg Development Corporation paid the Village $15 million for the (development, which included) underground parking, the sub-station, the elevator and the restrooms. We paid for that. The Village gets $325,000 a year from the parking spaces in Christie Place. The Village gets tax revenue from the commercial operations and gets money back from county sales tax. None of this has been incorporated into your report or considered when you talk about fairness."

He continued, "There is no loophole – it's the law and the Village has followed the law. When you look at the true facts, we are not subsidized. In fact, we have subsidized the Village of Scarsdale."

Sean Cohen from Chesterfield Road asked, "Is this just for Christie Place or for all homes? Christie Place has a restrictive covenant that limits sales to seniors without children in the school. Values on Christie Place are based on that deal."

Randy Guggenheimer said, "I was a member of the Forum's Revaluation Committee and I did not sign onto the report. The effect of the report from a practical perspective was to transfer a lot of money from a very few people onto a large group. Each condo owner would have to pay $25-$30,000 more per year to give a savings of $150 to everyone else."

Former School Board President Liz Guggenheimer added, "I have a few reactions. Is this really a report coming out of the Scarsdale Forum? It's a wonderfully written report presenting one perspective. Is it appropriate for the Scarsdale Forum to call this a report? She continued, "Fairness can be in the eyes of the beholder. I rely on the Village Board and Board of Education to look into this issue. Is this something we want to be the report of the Forum – or is it a document of the opinion of a few members?

Picard commented again, "If the Village had decided just to build a parking garage they would have had to float a bond and the taxpayer would have paid. We are paying for the garage, not the taxpayers."

Speaking in favor of the option, former Village Trustee David Buchen said," The community decided that there was inequitable tax distribution. We spent $1 million trying to rectify this. In pursuing equity among homeowner we are stumbling on the condo owners. The magnitude of the inequity demonstrates why it is not fair. Every homeowner needs to be treated the way we are treated."

Representatives from Christie Place distributed sheets of "Background and Facts" to support their case.

Among the facts were:

• The Village took approximately 1.6 acres by eminent domain in 1999
• The property brought no tax revenue to the Village for at least 7 years and was an eyesore.
• GDC constructed and paid $15 million for the costs for garage facilities, a police substation, underground public parking, an elevator and two restrooms. In purchasing their units, the Christie Place Unit Owners repaid that amount to Ginsburg.
• The owners of the 42 units on 1.6 acres paid $345,000 in real estate taxes in 2013
• The Christie Place unit owners are carrying the remaining $2.75 million note from the construction of the garage, of which 80% is owned by the Village, and have been paying $137,500 in annual interest.
• The owners of commercial properties at Christie Place paid $183,000 in real estate taxes in 2013.

Though there were only 19 members of the Forum at the meeting, the group took the measure to a vote and it was approved with 11 members voting yes, and 8 voting no. Given that the Forum's 2012-13 phone book listed over 400 members it is questionable whether a vote by 19 members is representative of the will of the membership. We asked Forum President David Irwin about the Forum's bylaws, and here is what he shared: "The Forum presently has something in the neighborhood of 450 members. The quorum requirement for membership votes is flexible. Although there is a set number for membership meetings in the by-laws, which I don't believe has been reached at any meeting in the recent past, the by-laws also go on to say that the determination of a quorum is up to the President. By necessity Presidents have been relying on this provision for some time."

The League of Women Voters of Scarsdale will hold an information meeting about the Homestead Tax Option on Thursday February 27 at the Scarsdale Library. The public is invited to attend the first portion of the meeting which will include a panel discussion and a question and answer session.